SMEs: Take care of creditors

09 June 2019 | Banking

Windhoek • Mbo Luvindao

There comes a time in any entrepreneur’s lifecycle when situations get tough. With the persisting drought combined with a challenging economic environment, entrepreneurs may find themselves faced with cash flow difficulties, which can negatively affect payments to creditors.

A creditor could be a supplier or person that has provided money, goods or services to a business and expects to be paid on an agreed date. Any business will find it difficult to survive when faced with cash flow issues. This can be tough for the business, which might find itself late or missing its financial obligations agreed with creditors. To be on top of the situation, it is best to communicate with your creditors beforehand.

Here are seven tips to guide you on how to communicate with creditors during tough times:

• Do not wait for your creditors to call you – be the one to open up the channel of communication. Make sure that you reread and study your contract and statements and do some research on your rights and that of the creditor so that you are well informed. Once you have the necessary information, request to meet with your creditors, possibly in person as this will demonstrate yours seriousness of trying to find a solution to the problem.

• Creditors have heard it all. Be honest and tell them the reason why you could not make your payment and provide as much information as possible. Even if you may have been irresponsible, tell your creditors – they will appreciate your honesty.

• Backed up with further information gathered before the meeting, have conversations with your creditors while you negotiate possible solutions. This will start to open up new options regarding your payment options and arrangements.

• Look at the income and expenditure of your business before agreeing to any payment arrangement. Make an offer first, for instance if you know that you can only make payment in a month’s time, ask for an extra month so that you do not run the risk of putting yourself under unnecessary pressure to deliver on the promise.

• When you and your creditor have made an agreement, keep track of whom you spoke to and make sure that there is a signed written record of any agreement with your creditors.

• Keep your creditors informed of any new developments in yours business. This will grow your relationship with your creditors in a long term.

• Communicating with your creditors can save you money, time, energy and stress. The experience of approaching them in times of trouble can be a life changing one. It might also be your first step to financial freedom.

As a Namibian bank, which values customer relationships, Bank Windhoek understands that entrepreneurs, besides making a profit, also face financial risks. The Bank has a mentorship programme dedicated to entrepreneurs. This is Bank Windhoek’s way of investing within the communities where it is active.

* Mbo Luvindao is the manager of Bank Windhoek’s ESME finance branch

Similar News


Fraudsters at it again

1 week ago - 16 June 2019 | Banking

The Bankers Association of Namibia (BAN) has warned of new scams that fraudsters are using to steal money from unsuspecting clients.According to BAN chairperson Sarel...

For more peace of mind

3 weeks ago - 02 June 2019 | Banking

FNB Namibia recently introduced an additional safety measurement called Online Secure, which requires customers to enter a One Time Pin (OTP) as confirmation that an...

Tying the knot on a budget

1 month - 26 May 2019 | Banking

As soon as you are engaged, you start thinking of your big day with the hope that it will be a memorable affair. You want...

Protecting more than your PIN

1 month - 12 May 2019 | Banking

Windhoek • Riaan ViljoenInitially bank cards were stolen and used at ATMs and shop check-outs or counterfeit cards were created. As a result, banks have...

A helping hand in need

1 month - 12 May 2019 | Banking

The FNB CARE platform ensures customer opinions are logged, heard and tracked towards resolution, as well as provide FNB the opportunity to engage with and...

FNB ensures customer-centricity

1 month - 06 May 2019 | Banking

Business Intelligence Africa (BIA) recently conducted an online customer satisfaction survey of FNB customers using international benchmark standards to solicit feedback based on a cause-and-effect...

Go forth and save!

2 months ago - 15 April 2019 | Banking

Many graduates can benefit by adopting good money management principles early in their careers to ensure a stable and stress free financial future. “Whether you...

Raising money-smart kids

2 months ago - 14 April 2019 | Banking

Windhoek • André Le RouxFinancial literacy focuses on the knowledge and skills you need to make effective and informed money management decisions. Gaining the knowledge...

Revolutionising payments

2 months ago - 07 April 2019 | Banking

The Payments Association of Namibia (PAN), in partnership with the local banking and payment service providers will be introducing a brand new solution, called NamPay,...

Happiness aplenty

2 months ago - 31 March 2019 | Banking

The FirstRand Namibia Foundation Trust recently hosted a networking breakfast to help charity organisations raise more funds through the FNB Happiness Store. “The Happiness Store...

Latest News

Building bridges

3 days ago - 23 June 2019 | Infrastructure

Construction work continues on the Windhoek - Hosea Kutako International Airport road, with works set to start again on the bridge over Frank Fredericks drive...

Skills training for ­vulnerable moms

3 days ago - 23 June 2019 | Local News

Ester Kamati Twenty-five young mothers from the Lidar Community Foundation are receiving skills training for the next six weeks, thanks to the support of the...

Art and pets = Animals...

3 days ago - 23 June 2019 | Events

The SPCA Windhoek held its annual fundraiser – Animals by Night – last week, with a spectacular event at the FNCC.According to general manager of...

We are running out of...

3 days ago - 23 June 2019 | Disasters

Windhoek • Elvira Hattingh The date for dams supplying Windhoek to run dry has now advanced with between two and three weeks. The reason for...

Hope for Justin

3 days ago - 23 June 2019 | People

Walvis Bay • Leandrea Louw Justin Koch, a ten-year-old boy from Walvis Bay, has been ­battling with cerebral palsy spastic diplegia all his life.Born...

Help hier, asseblief!

3 days ago - 23 June 2019 | Social Issues

Windhoek • Rodney SwartbooiEk was onlangs by ’n konferensie op Otjiwarongo en dit was op pad terug wat ek afgekom het op ’n gesin, ’n...

Familie sonder hoop

3 days ago - 23 June 2019 | Social Issues

Nkurenkuru • Kenya Kambowe 'n Familie van vyf in die Kayeure-nedersetting in die Musese-kiesafdeling van Kavango-Oos bly in 'n 2x2 m-struktuur bestaande uit stukkies muskietnet,...

The heartbeat of the city

3 days ago - 23 June 2019 | Business

Windhoek • Lisa Plank A taxi driver cruises down the street, loud music blaring from the loudspeakers inside the car. With one hand he casually...

Pageant winner supports schools

3 days ago - 23 June 2019 | Social Issues

Winter is always a time for reflection and appreciating what you have, and this year is no different!During 2018, the first runner up of Miss...

Load More